6 05 2010

Fried is temporarily heading up one of the bigger corporations in town whilst they look for a new chief executive (the last one was “let go” for committing financial irregularities). By his own admission he is past retiring age but he also admits he is quite enjoying the challenge. One of the bigger challenges is recapitalizing. Like a lot of Zimbabwean companies, the one he heads has invested little in new equipment over the last 10 years and now have the task of finding the money, in a very short money market, to do so.

I was reflecting on this 2 days ago as I drove across town to the Tobacco Research Board near the airport and went through yet another set of traffic lights not working. ZESA, the electricity utility that intermittently supplies the nation, has probably not done any meaningful recaptialization in the last 20 years and now it really is showing in the power cuts. They are probably not even generating (pun) enough turnover to keep the company going on a day-to-day basis. Of course the endless shutdowns do nothing to help the moribund economy and like the economy, ZESA is going to need a massive cash injection to get it back up to potential (another pun for the electronic geeks).

I was going to the TRB to look at the potential of growing tobacco seedlings on spec, something we have not done for some time now but business is poor and interest in tobacco high with the high prices, more than $4/kg, so it may be worth the gamble. Parked in the way of the steps into the TRB was the director’s new Toyota Landcruiser, a shiny example of misplaced recaptialization. I wondered what the staff who probably cannot afford their own fuel even if they own a vehicle thought of it. Oh, I should mention that the director of the TRB is approved by none other than Robert Himself.



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